A Captain in the Ranks Part 25
"I have twelve thousand dollars in New York----"
"Where the interest rates are small," interrupted Tandy. "You want to bring it West, where it will earn more. I understand. You're right in that. The West is the place for men and money to do the best they can for themselves. This part of the country is growing like Jack's beanstalk. You must have noticed it."
"I certainly have. Indeed, I suppose that never before in all history did any region grow so fast or so solidly."
"There! You've hit the nail on the head," said Tandy. "Solidly! And that accounts for many things. The conservative people of the East never saw anything like it, and they can't quite believe it. They don't realize the wonderful soundness of things out here. They have learned to think that high interest means poor security. In the East, where there is plenty of money and very little development going on, it does. But here in the West the case is different. Here, interest is high and dividends large, simply because the country is growing so rapidly, and developing its resources so wonderfully fast. Let me ill.u.s.trate. My friend, Captain Hallam, recently bought a mine up the State. It hadn't been properly developed, so he bought it at a low price and capitalized it at cost, adding a trifle for improvements. That mine is now paying twenty per cent, dividends on its stock, in addition to a large expenditure every month for improvements. Then, again, Captain Hallam is selling off the farms on the surface at a price that will presently pay the whole first cost of the mine. When that is done, the mine will stand him in just nothing at all, and all the dividends the stockholders get will be just like so much money found--picked up from the prairie gra.s.s, I might say.
Is there any danger in that sort of thing? Is a share of that stock a doubtful security to the man who has already got back the entire purchase price? True, it pays twenty per cent, dividends on its face, and that scares the conservative galoots in New York. That's just because they have got it ground into their minds that high interest always means poor security. But, come, I want to take you for a drive around Cairo, to show you what we are doing here and what we are planning to do. I think when you see it you'll know for yourself where to put your money. Can you go with me for a drive?"
"Very gladly. But first, I want to arrange to bring to Cairo what money I have. I may not want to invest it all here, but it will be handy to have it here. I should like to put it into your bank as a deposit. But I must draw on New York for it, and get you to take my draft. Won't you direct your cashier to telegraph the Fourth National Bank of New York, asking for what amount my drafts on that inst.i.tution will be honored?
Then, when we get back from our drive, I'll draw for the money and place it on deposit with your bank, where I can put my hands upon it when necessary."
The telegram was sent, and then Tandy took Temple in his carriage--one of the best in Cairo at that time--and showed him all there was of resource in the town, lecturing, meanwhile, on the prospects of Cairo as a future great commercial and manufacturing center. He showed him all there was to be shown, and then said to him:
"Now, I'm an apostle of Western development, but still more I'm an apostle of the development of Cairo. I'm a bull on the country, and a bull on this city. There is much to be done, and it will require the investment of a great deal of money. But the investments will pay as nothing else promises to do. We must have grain elevators, and mills, and all the rest of it. We've two big flour mills already, and there will be two or three more within a year. They must have barrels by thousands and tens of thousands. Now a man of your intelligence must see that empty barrels, being bulky, are costly things to transport over long distances, while the mills must buy them at the lowest possible price. Otherwise they can't sell flour in compet.i.tion with the mills of other cities. So the necessity of having a big barrel factory here is obvious, and so is the profit. I am just forming a company for that purpose. We have abundant timber right at hand, just across the two rivers, in Missouri and Kentucky. We can make barrels at less cost than they can be had for in any other city, while we have a local market that will be unfailing. The company is capitalized at twenty-five thousand dollars, and a good part of it is already subscribed."
He did not say that none of it had been paid for yet, and that he was unsuccessfully trying to find buyers for it.
"It's a sure thing. The profits will be large from the beginning, and the stock, as soon as the factory is in operation, will jump up fifty per cent, at least. If you want a thousand or so of it, I'll let you in on the ground floor. Otherwise, I'll take it myself."
"That impresses me very favorably," answered Temple truthfully. "It is an enterprise based upon sound principles--one that offers a supply in direct answer to a demand. I shall probably decide to take a little of that stock, if I can get some other securities to go with it. But for a part of the money I have to invest, I must get stock in some already established and a.s.sured business--I should especially like bank stock, either in your bank or Captain Hallam's. You see----"
"Oh, yes, I see. You want a nest-egg that will certainly hatch out a chicken. I'll find it for you. Let's leave that till to-morrow. Anyhow, I'm an advocate of local investments. I'm putting every spare dollar I've got into them, and I always advise investors to go into them. We're planning--Hallam and I--to set up a gas plant here. The city needs it, and it'll pay from the word go. I'll tell you about that to-morrow. You see, I want you to know just what we're doing and planning, and then we'll find the best places for you to put your money into. It's getting late now, so we'll drive back to the bank. I told the cashier to wait for us, though of course it's after banking hours."
On their return to the bank each of these men felt that he had "put in a good day's work." Tandy was sure that by letting the young man have a few shares in firmly established enterprises, he could "rope him in," as he phrased it in his mind, for the purchase of some more doubtful things. Temple, in his turn, was convinced that by buying into some of Tandy's more speculative enterprises, he could ultimately secure the shares he had been set to buy in the X National.
The telegraphic reply from the New York Bank had been received and was altogether satisfactory. So, late as it was, Temple drew on New York for twelve thousand dollars, and with the draft, opened a deposit account for that amount in Tandy's bank.
Then he went to his hotel. His first impulse was to send a message to Captain Will Hallam, asking whether he might take the barrel-factory stock, and perhaps some other things of like kind, in aid of success in his mission, but upon reflection he decided to act upon his own judgment, without consultation or advice. Hallam had given him a free hand, leaving him to work out the problem in his own way. Any communication between him and Hallam, or between him and Duncan, would involve something of risk. So he sat alone in his hotel room, thinking and planning.
He did not know or dream how anxious Tandy was to draw him into some of his schemes. He did not know that both the barrel factory and the gas enterprise had recently become veritable white elephants on Tandy's hands. He did not know that Tandy--in his eagerness to overreach Hallam--had "stretched himself out like a string," as Hallam picturesquely put it--by investing more money in these two companies, and several others, than he could just then spare. Especially, he did not know that Hallam had himself completely organized and capitalized both a gas company and a barrel company, and that Tandy's two companies represented an unsuccessful attempt to rival enterprises into which Hallam had "breathed the breath of life."
He was surprised, therefore, when a bell boy brought him Tandy's card, as he sat there in his lonely hotel room, planning the morrow's campaign.
"I thought you might be lonely," said the banker, as he was ushered into the room, "seeing that you're a stranger in town. So I have dropped in for a chat."
The "chat" very quickly fell into financial channels, and it did not proceed far before shrewd Richard Temple discovered some things of advantage to himself. Among the things discovered was the fact that Tandy was somewhat over anxious to hasten the business in hand.
Apparently he feared that Temple might fall in with other advisers. He seemed anxious to arrive at conclusions in a hurry, Temple thought, and the thought served at once to put him on his guard and to give him his opportunity. He listened with every indication of interest to all that Tandy had to say concerning the two still unlaunched enterprises--the barrel factory and the gas company. He asked interested questions concerning them, and ventured the suggestion that the proposed capitalization of the gas company was too small to admit of the best results.
"As an engineer," he said, "I know something of the cost of digging trenches and laying mains, and it seems to me that in order to equip itself for business this company will need a good deal more money than you plan to put into it as capital stock."
"I see your point," Tandy answered quickly, "and in any ordinary case it would be sound enough, though of course a company of that kind doesn't depend upon its subscribed capital alone, or even chiefly for its working capital. It is the practice in establishing such companies to issue and sell bonds enough to cover the cost of the plant, or very nearly that. The profits are so certain and so great that the bonds--even at so low a figure as five per cent. interest--go off like hot cakes. But that isn't all. Here in Cairo we shall hardly have to bond the company at all. You see we shall have almost no engineering work to do. In other cities a gas company must dig deep trenches--often through solid rock--in which to lay its mains. Here in Cairo we shall have no digging at all to do. You observed, as we drove to-day, that the city is built upon a tongue of very low-lying ground. A levee, forty-five feet high, has been built around it, and contractors are now busily filling in the streets so as to raise them nearly, though not quite, to the grade of the levee. Every street is a long embankment.
Now, when we come to lay our mains, we shall put them along the sides of these embankments, with no cost at all for digging."
So Tandy went on for an hour. At the end of that time Temple felt himself sufficiently sure of his ground to venture a little further:
"I am inclined to think," he said, "that I shall want to take at least a little of the barrel-factory stock to-morrow, and possibly I may subscribe for some of the gas stock also; of that I am not yet sure. But before I take either, I must invest four or five thousand dollars in something absolutely secure. I have been going over the latest reports of your bank, and the other one--Hallam's--and they have impressed me with the conviction that the very best and safest investment a man of small means, like myself, can make in this town, is in bank stock. This city is a point at which so many lines of travel and traffic converge, that the exchange business itself must be sufficient to pay a bank's expenses. In fact it pays more, as the reports show. And then there is the larger business--lending money on sound enterprises, financing industrial companies, and especially advancing money on bills of lading for goods in transit. In view of all this it surprises me to learn that the stock in the two banks here stands only a trifle above par."
"Oh, that's because of two things. People here have got it into their heads that anything less than ten or twelve per cent., as a return for money invested, is ridiculously small. So they don't want bank stocks.
On the other hand, the eastern capitalists have got it into their heads that anything which pays more than four or five per cent. must be risky, and so they don't set up banks here, as they surely would do but for their foolish timidity. The prospect of a big return for their money simply scares them out of their seven senses. So Hallam's bank and mine have a monopoly of as pretty a business as you'll find in a day's walk.
Why, when the rush was on last winter, and twenty steamboats a day were leaving Cairo with full cargoes--to say nothing of great fleets of grain barges--- Hallam and I both went to New York with our pockets full of government bonds, and borrowed money on them for sixty or ninety days.
We paid six per cent. per annum for the money, and got from one-half to one per cent. a day on most of it by advancing on grain drafts, with bills of lading attached. It was as easy as falling off a log, and as safe as insuring pig-iron under water."
"I have some notion of all that," answered Temple, "and that's the sort of investment I'm looking for. I might take in some more speculative things, but I greatly want to invest a few thousand dollars in the stock of one or other of these two national banks. Could you find somebody willing to sell?"
Tandy had expected this, and had prepared himself for it. But he pretended to think for a moment before replying. Then he said:
"As to Hallam's bank, it's useless to try. Hallam and Stafford own the whole thing, except that they have put a share or two into the hands of members of their own families, just by way of qualifying them to serve as directors, as the law requires. Neither one of them would sell a share for twice its market price. The same thing is true, in a general way at least, of our bank. The stock is so good a thing that n.o.body who has got any of it ever wants to part with it. But it has always been our policy to interest the people in the bank by letting them hold some of its stock. So a good deal of it is held in small lots around town, and now and then one of these is put into my hands for sale. I have four shares now to sell. It belongs to a tug captain who is down on his luck just now, and must sell. He wants more than the market price, but the bank has lent him money on it nearly up to its face value, and so I can do pretty much as I please with it. Ordinarily I should buy it myself, but I'm in so many things just now, and besides, I'd like to have you with us."
Tandy did not say that since he had seen Temple in the afternoon, he had taken in these four shares of stock for debt, at three per cent. below par, with the fixed purpose of selling them to Temple at three per cent, above par.
"How many shares did you say there are of it?" asked Temple.
"Four, if I remember right. I really oughtn't to let it slip through my fingers, but--well, I'll tell you what I'll do--if you care to subscribe for a few shares of the barrel company--say one or two thousand dollars' worth--I'll let you have the bank stock at a hundred and three."
Temple was eager to close the bargain, but he resolutely repressed his eagerness. He asked a score of questions, as if in doubt, and at last he hesitatingly agreed to make the purchase. The details were to be arranged on the next day, and so Tandy took his leave, and Temple lay awake all night, as he had done on the night before.
At four o'clock the next afternoon Temple strolled into the Hallam office to report results. He threw the papers upon a desk and sank into a chair like one exhausted. He was in fact almost in a state of collapse. He had not been conscious of strain at any time during his negotiations. He had, indeed, rather enjoyed the playing of such a game of wits with so wily an adversary as Tandy was. But all the while his anxiety to succeed in what he had undertaken had kept his nerves so tense that his mind had known no rest. All the time he had been painfully conscious that the smallest slip on his part, the smallest indiscretion, the slightest mistake in look, or tone, or act, would bring failure as a consequence. And he had all the time been agonizingly conscious of the fact that no less a thing than Guilford Duncan's reputation was the stake he played for--that Guilford Duncan's entire future was in his hands. There were reasons more vital to him than his friendship for Duncan, for regarding success in this matter as an end that must be achieved at all hazards, and at all costs. For years ago these two had quarreled as rivals in love, after being friends of the closest sort from infancy, and only Duncan's great generosity of mind had made forgiveness and reconciliation possible. d.i.c.k Temple knew that in the matter out of which the quarrel grew, he had grievously wronged his friend, and that knowledge had been to him a veritable thorn in the flesh, robbing even such happiness as had come to him of half its quality of joy. He had longed above all other things for an opportunity to make atonement, and that longing had been intensified since the meeting at the mine, by the generous treatment he had received at Duncan's hands. His Mary shared it in full measure, too, as she shared every worthy impulse of his soul. It had been a grief to the gently generous wife that the man she loved must live always under so distressing an obligation to the friend who had so magnanimously forgiven.
When this opportunity of repayment came to him, therefore, his first thought was of Mary. He wrote to her immediately after his first conference with Hallam, telling her of the matter in a way that filled her soul with gladness and fear--gladness that the opportunity was his at last, and sleepless fear lest he should be baffled and beaten. So when at last success was his, when he received from Tandy's hands the papers that secured his purpose, his first act was to telegraph to Mary the message:
Glory to G.o.d in the highest! I have paid my debt to Guilford Duncan.
It was fire minutes later when he entered the Hallam offices and laid the papers before the head of the house, saying only:
"I've secured the stock." When he sank into the chair, Hallam was quick to see his condition.
"Go up to Duncan's rooms and go to bed," he urged. "You've not been sleeping."
Recovering himself quickly, Temple answered:
"No, I think I'd rather not. If you've no further use for me, I think I'll go home by the train that starts an hour hence. There'll be time enough between now and then for me to render you an account of money spent, and give you my check for the balance in Tandy's bank. I don't want to see Duncan just now."
Hallam understood. "Very well," he answered, as Temple turned to a desk.
"You've saved Duncan, and there's nothing more for you to do here. But you must come back for the final grand tableau just a week hence. I'll leave this stock in your name till then, and you shall walk with me into the stockholders' meeting and help me salivate old Napper Tandy. We'll teach him not to play tricks."
Captain Hallam spoke no word of commendation for the way in which Temple had done his work. Words were unnecessary.
"I hope I made no mistake in subscribing for that barrel company stock," said Temple as he pa.s.sed the completed papers over to Hallam.
"At any rate, I'd like to keep that myself, if I may, whether it ever proves to be worth anything or not. I've acc.u.mulated enough money to pay for it."
"Oh, as to that," answered Hallam lightly, "the stock will be good enough. I'll make it so by taking a majority interest in the company and consolidating it with my own. You see, we simply must do something for Old Napper Tandy."
XXVI
A PACT WITH BARBARA